Sysco Posts Q2 Earnings Above Street View As Operating Income Improves

Sysco Corp SYY reported fourth-quarter FY24 sales growth of 4.7% to $20.20 billion, beating the analyst consensus estimate of $20.10 billion.

U.S. Foodservice operations sales rose 4.1% Y/Y, and International Foodservice sales grew 3.6%.

Gross profit increased 3.9% Y/Y to $3.7 billion, and the gross margin compressed 11 basis point to 18.1%.

The operating margin contracted 10 basis points to 3.5%, and operating income for the quarter rose 1.7% to $712 million. Non-GAAP operating margin expanded 3 basis points to 3.9%.

Adjusted EBITDA increased 4.4% Y/Y to $969 million in the quarter. Adjusted EPS of $0.93 beat the consensus estimate of $0.92.

Sysco held $793 million in cash and equivalents as of Dec 28. Operating cash flow for six months totaled $498 million, with a free cash flow of $331 million.

During the first 26 weeks of fiscal year 2025, Sysco returned $803 million to shareholders via $300 million of share repurchases and $503 million of dividends.

"Our International business was particularly strong, delivering a 14.5% increase in operating income, and a 26.5% increase in adjusted operating income," said Kevin Hourican, Sysco's CEO.

Price Action: SYY shares are trading higher by 0.70% at $77.40 at the last check Tuesday.